IFA HR, KREC and John Buck Company partner in US$250 North American private equity fund to expand YOTEL brand
Fund’s goal is to develop more than $650million in North American YOTEL hotels over the next 3 to 5 years
YOTEL, considered the most radical hotel in the world, together with The John Buck Company, one of the most trusted and well respected names in North American real estate development and investment, follows the opening of YOTEL’s first city centre hotel in New York with the announcement of a dedicated real estate fund platform focused on the expansion of the brand in North America.
Talal Jassim Al-Bahar, Vice Chairman and CEO of IFA Hotels & Resorts (IFA HR) stated: “Together, as YOTEL’s long-term equity partners, IFA HR and Kuwait Real Estate Company (KREC) have partnered with The John Buck Company to raise a $250 million discretionary private equity fund with the goal of acquiring and developing more than $650 million worth of YOTEL hotels in North America over the next three to five years.”
As co-General Partners of the Fund, YOTEL and The John Buck Company will jointly identify, acquire, develop and redevelop YOTEL properties in select major U.S. metropolitan cities including projects currently being reviewed in Boston and Chicago. The Fund will leverage YOTEL’s innovative hotel concept, brand and management expertise combined with The John Buck Company’s strong development reputation and prior private equity real estate fund management experience.
“Introducing the American market to the YOTEL brand was a key focus in 2011 with the opening of our 669 cabin YOTEL in New York which provides affordable luxury and is a solution to expensive and boring hotels,” said Gerard Greene, CEO of YOTEL. “In 2012 we have expanded this goal and are truly honoured to have the opportunity to partner with one of the most well respected developers, investors and real estate owners in the world. The formation of a dedicated real estate fund with The John Buck Company is a pivotal step in making YOTEL a household name throughout North America.”
“YOTEL is an extremely innovative and exciting brand and we are truly excited to be a part of their growth strategy,” said Jack Buck, Principal of The John Buck Company. “Along with our new partners in YOTEL and IFA Group, we look forward to utilizing our investment expertise and development experience as we help expand the brand in North America. Given YOTEL’s truly unique concept, strong operating margins, management team and ability to mass approximately 30% more keys on a development site vs. other hotels, it should make for a great partnership.”
The Fund is currently in discussions with potential limited partners and will utilize a multi-pronged strategy for investments.
Emad Al Essa, CEO of KREC, said: “We quickly realised how rewarding our investment in YOTEL New York was last year and that has driven our strategy to further expand the brand across North America. The goal of the fund is to acquire existing development sites and/or condominium interests in mixed-use development projects, acquire non-hotel buildings that can be converted to YOTEL hotel properties and/or to acquire select existing hotels that can be converted to YOTEL hotel properties.”
The partnership anticipates an official closing of the Fund in early 2013 and is immediately seeking investment opportunities throughout North America.
Al-Bahar concluded: “This is a brand that is changing the landscape of hospitality by carving out a new segment – affordable luxury. YOTEL is the future and the time for investing is now.”
YOTEL was created by YO! founder Simon Woodroffe and YOTEL CEO Gerard Greene. Inspired by first class travel, they have translated the language of luxury airline travel and Japanese influence into a small but luxurious cabin. YOTEL’s first city centre location 2 blocks from Times Square at 10th Avenue and West 42nd Street features 669 stylish cabins. ‘Premium’ cabins come with convertible beds for saving space, monsoon showers, technowall with TV and MP3/iPOD connectivity, workstation and free super strength WiFi. For the ‘extra’ factor there are 19 ‘First’ cabins, some with private outdoor terraces and hot tubs and three 1,100 sqft VIP 2 cabin suites with 360 degree views, rotating king size beds and dining tables that convert to a billiard table! YOTEL New York is home to YOBOT, the world’s first robotic luggage concierge, and ‘FOUR’ with 20,000 sqft of flexible entertainment space to include ‘Dohyo’ restaurant, Club Lounge surrounded by private bookable cabins, New York’s largest outdoor hotel terrace and Studiyo for meeting, cinema screening and parties. YOTEL currently operates three terminal airport properties at London Heathrow, London Gatwick and Amsterdam Schiphol.
About IFA Hotels & Resorts
The largest investor in YOTEL, IFA Hotels & Resorts is an international real estate and mixed-use hotel and resort developer with projects designed to meet a broad spectrum of hospitality needs from the affordable convenience of YOTEL to luxurious Fairmont Zimbali. IFA HR has more than 40 projects throughout the Middle East, Europe, Africa, Asia, North America and the Indian Ocean region.
In addition to travel destinations, the company offers sound appreciating investment opportunities ranging from hotel condominiums and vacation clubs to private residence clubs and stunning residential homes. In every market in which it operates, IFA HR partners with leading companies offering local expertise, including Related Companies in the USA, Raimon Land in Thailand, Istithmar in the UAE and Tongaat Hulett in South Africa.
Listed on the Kuwait and Johannesburg Stock Exchanges, IFA Hotels & Resorts (IFA HR) is a worldwide leader in the development of mixed-use hotel and residential resort projects as well as luxury leisure services. The company's main shareholder is Kuwait-based International Financial Advisors. The company’s’ South African arm, IFA Hotels & Resorts Limited, was listed on the JSE Limited in February 2006.
The IFA HR team was responsible for the financing of YOTEL New York, raising a loan of US$240m and equity of US$75m. www.ifahotelsresorts.com www.ifahi.com
About Kuwait Real Estate Company (K.S.C)
Established in 1972 as a Kuwaiti shareholding company (K.S.C), Kuwait Real Estate Company is one of the country’s leading companies in its field. It was the first ever real estate company incorporated into the Kuwait Stock Exchange. Among its many achievements, the company developed the first mixed-use retail, office, and car park development in Kuwait and pioneered the Build-Operate-Transfer concept prior to any formal regulation being in place.
For years, KREC’s prestigious name and reputation as a pioneer in the real estate sector in Kuwait have been associated with high occupancy of its residential and investment units as well as its diversified strategy in the real estate and investment sector.
Today, the company's business is based on real estate activities in various fields locally, regionally and internationally. Having projects spanning from Kuwait to the United States, Kuwait Real Estate Company continues to successfully implement its strategic vision to the benefit of its clients, investors and the general public with the highest investment, managerial & technical standards. KREC's broad and extensive experience, earned over several decades, in both Europe and the United States, in a variety of property sectors will serve to enhance the partnership. Whether it be
real estate development, property management, or real estate finance, KREC will complement its partners and strengthen the venture.
About The John Buck Company
The John Buck Company was established by John Buck in 1981 and has since expanded into a vertically integrated real estate services firm that focuses on high-density, urban commercial real estate. The firm has completed over $11 billion of real estate transactions and acquired, developed, or redeveloped over 40 million
square feet of commercial property including office, residential, retail, mixed-use, and hotels. Over JBC’s history, the company has established a proven track record in evaluating real estate opportunities from a variety of perspectives including: investor, developer, and asset manager. The successful execution of these projects relied on a customized strategy formulated by JBC personnel in the fields of development, leasing, and property management. JBC underwrites and staffs each of its projects with professionals specifically trained and experienced in valuation, finance, project feasibility analysis, leasing, property management, design, and
construction. As a result, JBC utilizes the wealth of knowledge within the firm to maximize value at every step of the real estate transaction. www.tjbc.com